Hamburg The expansion of mobile networks in Germany is still progressing more slowly than planned. In particular, dead spots in rural areas, so-called “white spots”, are still not adequately equipped with infrastructure. A punctual supply, which was planned until the end of the year, therefore hardly seems possible. This emerges from a confidential evaluation by the Federal Network Agency, which is available to the Handelsblatt.
Of the 600 white spots to be supplied by New Year’s Eve, only 89 are closed. Parts of the industry also paint a poor picture in other areas: the requirement to provide 98 percent of households with a transmission speed of at least 100 Mbit/s has only been achieved by Telefónica (O2) in five federal states, for example. The evaluation reflects the status of August of this year.
Experts and insiders therefore do not expect that all three major network operators will meet the minimum requirements by the end of the year, which they committed to at the last frequency auction in 2019.
“This is going much too slowly again,” complains a member of the Advisory Board of the Federal Network Agency. The original assurances of the providers have sometimes degenerated into a “farce”. The delays in the white spots are “frustrating,” said Reinhard Houben (FDP), who is also a member of the advisory board, to the Handelsblatt. “1&1 and Telefónica now have to do everything they can to meet the government requirements for network expansion.”
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Maik Außendorf, spokesman for digital policy for the Greens, announced that he would “commit himself to a tougher approach to the network operators” if they again failed to keep their promises by the end of the deadline.
Towards the end of the year, the rate of expansion usually picks up again. But the backlog is large. The years after the auction were apparently not used consistently enough by some suppliers.
The company 1&1, which is currently building a new, fourth network, had already admitted in September that it was likely to violate the conditions. The first 1,000 base stations of the new network should now only be connected “in the summer” instead of by New Year’s Eve, as stipulated. Responsible is the “significant delay in delivery” of a business partner.
Deutsche Telekom and Telefónica continue to assure punctual execution in accordance with the requirements. One is “well on the way”, informs about the Telekom. “So far we have always met our expansion requirements.” Telefónica, which had provoked resentment after the previous frequency auction with grace periods and large gaps, emphasizes that it intends to “continue massively” to push ahead with the expansion. By the end of 2025, the company’s own 5G network should reach the entire population.
Vodafone only announced that it was pushing ahead with the expansion of its own infrastructure “at great expense”. It remains to be seen whether or when the promised expansion targets will be achieved.
Blue letter from Bonn
At the Federal Network Agency, which is responsible for monitoring them, skepticism now extends to the top. President Klaus Müller recently reminded the bosses of the four major mobile phone companies in writing of their obligations due to the stubborn backlog, as the Handelsblatt learned.
When asked, a spokesman for Müller admits that the President recently advised the CEOs in a letter from September to “make every effort” to “quickly meet the coverage requirements”. At Telekom, which generally expands thoroughly compared to the competition, this reminder is said to have provoked irritation internally.
The President of the Federal Network Agency has written to the heads of the four major mobile phone companies reminding them of their obligations due to the stubborn backlog.
(Photo: dpa)
The tone of the authority, which under Müller’s predecessor Jochen Homann was more conciliatory in dealing with the telecoms industry, is apparently becoming rougher: In the event of non-compliance, sanctions such as fines or penalties would be checked, the agency said.
In their environment it can be heard that they are now tired of the lax handling of some network operators with the requirements. Less forbearance can be expected under the former Green Party politician Müller.
Even if some of the gaps in the network can be explained by tough approval procedures or delivery bottlenecks due to the chip crisis: the differences between the telecom companies show that there is sometimes a lack of will. From a certain degree of coverage, further network expansion is considered uneconomical – and is therefore preferably avoided.
In industry circles, however, the difficulties of 1&1 in particular are causing malice. The newcomer, who has so far been using Telefónica’s infrastructure for its mobile services, wants to attack the competition with a particularly powerful system.
With the help of the Japanese digital group Rakuten, an ultra-fast network without legacy issues is to be created. “Our network will be the most modern in Europe,” promised 1&1 boss Ralph Dommermuth in an interview with the Handelsblatt in May.
>> Read the interview here: 1&1 boss Ralph Dommermuth promises the most modern 5G network in Europe
In the meantime, connoisseurs and observers are wondering whether Dommermuth has overdone himself with his schedule. An insider estimates that further delays are “extremely likely”. In corporate circles, for example, there is talk of “only a handful” of antenna sites that Dommermuth’s partner American Tower has set up so far.
His own subsidiary Versatel, which is responsible for the fiber optic supply of the locations, is also said to be in default. Dommermuth plans to transfer the first 1&1 customers to the new network as early as next year. However, they will then only be able to surf and make phone calls sporadically via the modern Rakuten network. Its construction has apparently been delayed by more than a year.
1&1 boss Ralph Dommermuth in distress
American Tower declined to comment when asked. 1&1 announced that the start of the network would “not be affected” by the delays. For the time being, however, more regions than planned will continue to be dependent on Telefónica’s infrastructure. The ambitious expansion plan is changing insofar as half of German households will not be reached by 2025 – as originally communicated – but only one to two years later.
The political will to set up a fourth competitor in the German mobile communications market should keep the risk of sanctions relatively low for 1&1. On request, the Federal Network Agency also announces penalties. 1&1 has been asked several times to provide “specific” information about its expansion plans.
Dommermuth’s biggest concerns are likely to be the problems at Vantage Towers, one of its most important partners. The British telecom giant Vodafone spun off its mobile tower network into Vantage in 2019 and listed it on the Frankfurt Stock Exchange. Since then, the company has been courting tenants like 1&1 in order to increase the utilization of its towers – and thus its returns. Dommermuth wants to have up to 5,000 antennas installed on Vantage’s infrastructure.
One of 1&1’s most important partners is having problems with Vantage Towers.
(Photo: Michael Englert for Handelsblatt)
Apparently, working together can be exhausting at times. In the context of the Vodafone subsidiary – the British currently hold more than 80 percent of the shares – there has been talk of mismanagement or failures for months; the turnover of managers is considered to be noticeable. In the spring, CEO Vivek Badrinath spoke of “challenges” in terms of the supply chain, which, according to a company statement, will last until 2023.
In Vantage circles, people are therefore skeptical about the fulfillment of the requirements of the Federal Network Agency. The company, it says, is currently overwhelmed with the parallel expansion for Vodafone and 1&1. The recruitment of staff continues. This could also explain why Vodafone is relatively tight-lipped about meeting its own coverage requirements.
Vantage does not comment specifically on this. A spokeswoman announced that Dommermuth will be provided with the “first” antenna sites this year. Nothing has changed in the plan to make 1&1 “at least 3,800 and potentially up to 5,000 locations available by the end of 2025”.
More: Vodafone facing liberation through billion-dollar deals with fiber optics and radio towers.